P L D 1966 Supreme Court 472 (PLP)

This was the principle upon which the Privy Council in the case of The Colonial Sugar Refining Co. Ltd. v. Irving (1) L R 1905 A C 369 refused to dismiss an appeal which had come before them by the leave of the Supreme Court of Australia. The action in that case had commenced on 25th October 1902. It was set down for hearing in July 1903, but was heard on 4th September 1903. In the mean time, the Judiciary Act of 1903 had received the Royal assent on 25th August 1903, and by this Act the right of appeal to his Majesty in Council given by the Order in Council of 1860 had been taken away. Notwithstanding this, the Supreme Court of Australia granted leave to appeal from its judgment of, 4th September 1903. The Privy Council held that the appeal was competent and observed:‑ "As regards the general principles applicable to the case there was no controversy. On the one hand, it was not disputed that if the matter in question be a matter of procedure only, the petition is well founded. On the other hand, if it be more than a matter of procedure, if it touches a right in existence at the passing of the Act, it was conceded that, in accordance with a long line of authorities extending from the time of Lord Coke to the present day, the appellants would be entitled to succeed. The Judiciary Act is not retrospective by express enactment or by necessary intendment. And therefore the only question is, was the appeal to His Majesty in Council a right vested in the appellants at the date of the passing of the Act, or was it a mere matter of procedure? It seems to their Lordships that the question does not admit of doubt. To deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regu lating procedure." Upon the same principles we too are of the view that the present appeal is competent and hold that the preliminary objec tion is not sustainable. Having disposed of the preliminary objection we now proceed to deal with the appeal on merits. The appellant before us is a limited liability company running a Cotton Mills at Okara. It had 5,409 workers of whom 3,827 are employed in a permanent capacity. It had two registered trade unions, one called the Sutlej Cotton Mills Employees' Union and the other the Textile Workers' Union. The mill is also a public utility service under the Indus trial Disputes ordinance, 1959. Strike notices were served by both the said unions on the appellant on the lst of February 1961, and on the conciliation officer on the 3rd February 1961. The conciliation proceedings failed on the 27th of February 1961, and the failure certificates were issued to the unions on the 16th of March 1961. On the basis of the above failure certificates both the unions filed separate applications before the Industrial Court of West Pakistan which consisted at that time of two members and a Chair man. Out of the two members one represented the workers and the other the employers. Each of these applications asked for adjudi cation in respect of 10 and 11 demands respectively, although the majority of the demands, though differently worded, were substantially for the same relief. Both these cases were consolidated and heard together by the Industrial Court which gave its award on the 26th of March 1962. The appellant feeling aggrieved by the award regarding two demands only, namely, Demand No. 3 relating to the grant of house rent allowance and Demand No. 4 relating to bonus, came up before this Court for special leave. Leave was granted in this case to consider four points, namely:‑ (1) Whether the circumstance that the certificate of failure by the conciliation officer was given out of time affects the validity of the reference to the Court? (2) Whether the proceedings taken in the absence of the Chair man, e.g. by one member recording evidence, are in conformity with the statute, and whether the award is vitiated by such a circumstance, or by the failure of the other member to take any part in the proceedings at any stage? (3) Whether the award in respect of house rent, being designed to bring about equality in the relative respect between one‑half of the workers who are provided with quarters by the Mills, and the other half, who are not so provided, takes sufficiently into account (a) that the provision of quarters is in compliance with a Government directive and (b) that the basic wages are settled in relation to living expenses, including house‑rent? (4) Whether the re‑settlement of the Mills' balance‑sheet by the Court, which has led to the disclosure of an enhanced profit balance and provided the basis of grant of a considerable increase in the bonus, is in accordance with facts and right principle? As regards the first point it is pointed out that under sub section (4) of section 5 of the Industrial Disputes Ordinance, 1959, if no settlement is arrived at before a conciliation officer, in the case of a public utility service within 14 days and in any other case within 28 days of the commencement of the conciliation proceed ings, the conciliation officer shall, at the close of the said period, issue a certificate to ‑the parties to that effect, provided that the period of conciliation proceedings may be extended by the mutual consent of the parties to this dispute. There was no such extension by mutual consent in this case and, as such, it is contended that under the above provisions the failure certificate had to be issued within 14 days of the failure. In the present case the failure admittedly took place on the 27th of February 1961, but the certificate was not issued until the 16th of March 1961. It is, therefore argued that the failure to issue the certificate in time invalidated the entire reference to the Industrial Court. We are unable to C find anything in section 5 to indicate that the failure of the con ciliation officer to comply with the direction contained in sub section (4) with regard to the issuance of the Failure Certificate necessarily renders the reference incompetent, for, all that subsection (5) of the said section says is that "any party to whom a certificate has been issued under subsection (4) may make an application to a Court for adjudication and determination of the industrial dispute or any matter constituting such dispute." This section does not itself provide the consequence of such failure on the part of the conciliation officer nor have the partied before the conciliation officer any control over his actions. In the circumstances, the direction in the statute as to the time within which the conciliation officer is to perform a public duty cannot be regarded as a mandatory provision. This principle is well settled; vide Maxwell on Interpretation of Statutes, page 364: "Where powers, rights or immunities are granted with a direction that certain regulations, formalities or conditions shall be complied with, it seems neither unjust nor inconvenient to exact a rigorous observance of them as essential to the acquisi tion of the right or authority conferred, and it is therefore probable that such was the intention of the Legislature. But when a public duty is imposed and the statute requires that it shall be performed in a certain manner, or within a certain time, or under other specified conditions, such prescriptions may well be regarded as intended to be directory only in cases when injustice or inconvenience to others who have no control over those exercising the duty would result if such requirements were essential and imperative." In the case of Hotel Idetropole Ltd. v. Employees' Union (1)PLD1964SC;633 also this Court has already indicated that the failure certificate may be issued at any time after the close of the period mentioned in subsection (4) of section 5 of the Ordinance. This point was, in any event, not taken at any earlier stage and is being taken for the first time in this Court. We see no substance in this contention, for, in our view, such failure does not affect the validity of the reference. The next point urged is that the proceedings before the Indus trial Court were wholly vitiated, as there was no application of the mind of the Chairman of the Court to the question in dispute. What happened in this case was that the evidence of several of the witnesses examined in the case was recorded by only one member who signed the depositions of P. Ws. 5, 6, 12, 14, 15, 16 and 17 for "Chairman". The evidence of P. Ws. 12 and 14 to 17 was recorded on the 15th of June 1961, and of P. Ws. 5 and 6 on the 24th of May 1961. The depositions of the other witnesses appears to have been recorded by the Chairman himself. The order sheet also shows that on some days the workers' representative, i.e. Mr. Abu Saeed Anwar, was alone present. It is, therefore, contended that there has been a serious departure from the usual practice followed by Courts. The Court consisted of three members and, therefore, it is urged that one member could not possibly represent the Court. In support of this contention reliance is also placed on a decision of the East Pakistan High Court in the case of East Pakistan Aluminium and Iron Manufacturing Company Tejgaon v. Chairman, Industrial Court, East Pakistan (1) P L D 1965 Dacca 211 where it appears to have been held that if a particular member of the Industrial Court does not either hear a particular dispute or is not consulted by the Chairman the decision given by the latter is without any legal sanction. It appears that in the case before the High Court the Chairman had not even consulted the member representing the employers before giving his decision. Section 7 of the Industrial Disputes Ordinance gives the cons titution of the Court. It is to consist of Chairman and two members to advise the Chairman. One of the members represents the employers and the other represents the workmen. Section 11 gives to the Industrial Court the powers of a Civil Court for enforcing the attendance of witnesses, examining them on oath, compelling the production of documents and material objects and issuing commissions for the examination of witnesses. Under the rules, however, it is provided that the Industrial Court has the power to act, notwithstanding any casual vacancy in its number and no act, proceeding or determination of the Court is to be called in question or invalidated by reason of any such vacancy (vide rule 9). Then rule 15 provides that the Court may accept, admit or call for evidence at any stage of the proceedings before it and in such manner as it may think fit. Reading these provision as a whole it would appear that the procedure adopted by the Industrial Court in the present case was certainly highly irregular but even so this case is distinguishable from the Dacca case in so far as in the present case there is no allegation that the award was not made in consultation with the members. The only defect pointed out is that certain evidence was recorded by a single member. Since the Industrial Court has also power under section 11 to issue commissions for the examination of witnesses it can well be urged that the single member in the present case acted as such a Commissioner to take evidence. The Industrial Court has also the power to take evidence by affidavits. Here, the evidence is indeed of a better quality, for, it has been duly tested by cross- examination. We have also examined the evidence so irregularly recorded and we find that it has no relevance to the issues now in dispute. It is, therefore, clear that this irregularity has not pre judiced any party. In these circumstances, we are not prepared to go to the extent of declaring the award to be vitiated, although we must make it clear that we do not approve of the procedure adopted by the Industrial Court in the present case. Where a Court consists of more than one person, all members of the Court should normally sit together or at least a majority of the Court should be present at all stages of the hearing of the dispute and participate in its adjudication. Coming now to the next question relating to house rent allowance the point urged on behalf of the appellant is that the award on this point is not in accordance with the principles laid down by this Court, in the case of Pakistan Petroleum Workers Federation v. Burmah‑Shell Oil Storage and Distribution Company Ltd. and others (1) P L D 1961 S C

479. The position in the present case was that the company actually provided quarters for 50 % of its staff at a nominal rent of Rs. 2 per month. In the circumstances, those who were not provided with quarters demanded a house rent allowance. The Chairman was himself of the view that as normally "housing forms an integral part of the wage structure and dearness allowance," it cannot be given separately to workers but in the instant case he thought that the company had, by giving quarters to some of its workers at a nominal rate, excluding housing from consideration in fixing the wage structure and the dearness allowance. In order, therefore, to remove this discrimination he took the view that house rent allowance should be given to those of the permanent workers who were not provided with quarters at the rate of Rs. 3 per mensem. Learned counsel for the company contends that this award is based on no evidence. There is nothing on the record to show that there is any inequality in wages or that workers not provided with quarters are paying higher rent outside. There was in this case no application of the mind by the Industrial Court to the relevant considerations laid down by this Court in the above mentioned case. Learned counsel for the respondent No. 3 also admits that the only relevant evidence on this question is that given by P. W. 7 Abdul Aziz, who asserted in his examination‑in‑chief that the cost of living had risen since 1958 and that he paid Rs. 15 per mensem as house rent as against only Rs. 4 in 1958. But in cross‑examina tion he admitted that he had since shifted from that house for which he was paying Rs. 15 per month and that since July 1958 dearness allowance had been increased by Rs. 8 per mensem. This would indicate that the increase in the dearness allowance had been granted taking into account the rise in the cost of living. The Tribunal has given, in our view, no congent reason for imposing this heavy burden in spite of the increase in the dearness allowance. There is no evidence to show as to what rents were actually paid by the workers and whether such rents were in excess of 10 % of their total emoluments which ranged between Rs. 78 and Rs. 80: These were all relevant considerations which should have been taken into account. Since this has not been done, we think that the award of the Tribunal on this demand cannot be sustained and must be set aside. As pointed out by this Court in the case of Pakistan River Steamers Ltd. v. Province of East Pakistan (2) P L D 1961 S C 393 the demand for house rent allowance is in effect a demand for an increase in pay and should not be allowed in the absence of evidence to show that rents in the area are higher than normal or that there has been an increase in rents since pay scales were last fixed. Coming now to the question of bonus the real grievance of the appellant‑company seems to be that in computing profits the Industrial Court acted wrongly by excluding from the profit and loss account produced by the company for the year ending the 31st of March 1961, certain items of expenditure claimed by the company as justifiable expenditure. The items so excluded were items of which the first was said to have been paid by way of charities and donations, amounting to Rs. 1,72,101'

88. The second was a sum of Rs. 8,86,000 which was shown as transferred to the head office account. The appellant made no attempt to explain as to what was the nature of the charities or why the transfer of such a large sum was made. The Industrial Court, therefore, took these two amounts into account as profits and came to the conclusion that the company had earned handsome profits and was easily in a position to pay bonus to its workers at the rate of basic wages of 21 months on the same principle on which it had already paid bonus to its workers at the rate of basic wages of one month and ten days. The appellant makes a grievance of the fact that sufficient time was not granted to it to produce its audited balance‑sheet for the year 1960‑61, as it had not till then been approved by the Board of Directors in India. The company also wanted to examine the chartered accountant, who had prepared the balance‑sheet but we do not think that this was necessary as the profit and loss account was admitted. In any event, this cannot be a legitimate ground for interfering with the award. The Industrial Court had the evidence of the workers as also the profit and loss account for the year ending 31st March 1961, before it which gave suffi cient material for arriving at a decision. It disbelieved that certain sums shown in the account were paid by way of charity and donations or transferred to the head office account, as there was no sufficient explanation as to why this was done. The company cannot legitimately make a grievance of the fact that upon the evidence adduced before it the Industrial Court has come to a certain decision. This Court does not in exercise of its special jurisdiction against such tribunals act as a Court of appeal, but restricts itself to considering the questions affecting the jurisdic tion of the tribunal or correcting illegalities apparent on the face of the record. In the present case, the jurisdiction was there and the Industrial Court had sufficient material before it to come to a decision on this question, keeping in view the principles upon which such a calculation of the profits had to be made. This it has done as it had the right to do and we see no reason to interfere with its decision. This disposes of all the contentions raised on behalf of the appellant. In the result, therefore, this appeal is allowed in part and the award of the Industrial Court with respect only to house rent allowance is set aside. In the special circumstances of this case, however, we make no order as to costs. K.B. A. Appeal partly accepted. .